Yeah, you heard me, INJFANG. As in, It's Not Just FANG anymore. That's because the Nasdaq hit an all-time high today and the gains are no longer limited to Facebook (FB) , Amazon (AMZN) , Netflix (NFLX) and Google (GOOGL) , now known as Alphabet. And while the whole market smoked today, it's the Nasdaq that's en fuego.
What's behind the resurgence?
First, let's get right to the elephant in the room: Apple (AAPL) . Not that long ago, Apple was just a trading vehicle for a quick gain, followed by an analyst's pummeling about how its best days were behind it. None of the things that should have mattered, things like customer loyalty, great consumer product, most admired brand, meant anything to these technology analysts.
They just knew that it was a hardware company with a tapped-out product and no further extension, no car that flies and runs on water, no Netflix killer, no year-long battery life and a Siri system that will crush Alexa even as we learned today that Siri receives 10 billion requests per month.
What these critics were missing was that Apple doesn't just have the best tech for its product class, it's got a razor razor-blade model that can't be beaten. That means people buy the phone and pay for services directly from Apple or buy some of the developer apps on display today and Apple gets a cut of each one.
The money from this stream is huge, so big that it would be a Fortune 80 firm and growing larger. It's also a far more lucrative stream with incredible gross margins. Let me be a commercial for Apple's service stream for a moment. I was gardening this weekend and my wife told me to take my pants off before I came into the house and take them right to the laundry room. I did it, but I forgot to take my phone out.
You can bet what happened next. And while we tried to save the phone by sticking it in a box of rice, it would have been better if we boiled the rice with the phone. At least we would have had something to eat. Now, I take my iPhone to the Verizon store -- sorry John Legere on your 60th birthday - and I ask the guy, a good guy named Mike: "Are my pictures going to be saved?" He asked me if I pay for the I-cloud picture back-up and I said, "I sure do, doesn't everybody?"
He said everyone pretty much has to. What is the cost to Apple for providing that monthly service?
So, the strength of Apple's services offering and its 52-week-high today, with a market cap of $945 billion, is exhibit A in the non-FANG romp.
Next up: the incredible run in the semiconductors. We had a recent swoon in the group. one part, the blocking by the Chinese of Qualcomm's (QCOM) buy of NXP Semi (NXPI) and the second part the lack of big Apple orders for new phones -- remember the service stream was responsible for the big upside and that didn't need chips. Now, some semis shouldn't even have been knocked down by these, chiefly Nvidia (NVDA) , which makes chips for data centers, autonomous driving, artificial intelligence, machine learning and gaming.
It took a little bit but ultimately the market was able to discern about what chip companies were pure cellphones and which weren't, which is how Nvidia found itself on the all-time high list. Remind me to give him a treat when I get home.
Nvidia's Jensen Huang is a brilliant visionary who is actually quite hard to understand because he operates on a different plane altogether from the rest of us, not unlike Andy Grove during the heyday of Intel (INTC) not that Bryan Krzanich is any slouch. On the contrary, because Intel is such a big deal in the data center and in autonomous driving and because personal computers, according to HP Inc. (HPQ) , are doing so well, Intel's stock has been flying.
Still as great at Intel is, the growth marvel is Nvidia and the last quarter was spectacular even if the sour pusses in Wall Street sold it off because the crypto business is soft.
Then there's Microsoft (MSFT) . Here's a company with a stock that just breached $100 and it isn't doing the move just personal computers, which are incredibly strong, or gaming, where the Xbox remains a leader. No, it is in the cloud with Azure, and Azure is growing like a weed.
Microsoft's bold. It bought LinkedIn and has made fortunes with the data company. Microsoft's smart: today it picked up Github, a web developer platform that's the gold standard for 1.8 billion customers, and it is paying $7.5 billion for the code-sharing company. It's a decision that was uniformly applauded by the sell side, something that was quite the opposite before CEO Satya Nadella took over. Microsoft has run, but I don't get the sense of an overheating. We have an absence of news right now and absence is making the heart grow fonder.
Or how about Adobe (ADBE) ? This remarkable company does all sorts of digitizing of commerce and it's been producing new, more sophisticated, software. The stock's been a cloud stalwart and the leader of the cloud kings that I talk so much about.
Then there's the payment processors: Square (SQ) and PayPal (PYPL) . I know they shouldn't be in the same sentence: PayPal is four times the size of Square. Yet the fact is that both stocks are visible winners is a reminder of just how robust and immature the payments model is.
Now there are other Nasdaq stocks that aren't tech that are finally getting some due. Consider Regeneron Pharmaceuticals (REGN) and Amgen Inc. (AMGN) , both with a plethora of new drugs, as the best ways to invest in a very down and out group. I see others are keen on Gilead Sciences, Inc. (GILD) today. I have no catalyst to recommend the stock other than a group move that we are quite clearly are smack in the middle of.
And FANG itself can never be dismissed. Google turns out to be a big winner in the privacy rules in Europe because you need consent to get pushed product and only the largest companies have figured that out, companies like Google and its affiliates. There was a time when Facebook and Amazon were both in the government's cross hairs. Amazon's crime? It entered an arm's length deal with the U.S. Post Office for delivery that President Trump wants broken.
Facebook's issues are well-known and today the New York Times tries to stoke the coals with a story about how Facebook somehow still shares your name and information with phone carriers. All I can say is, of course they do, and I bet a huge number of people are glad they do as there is no expectation of privacy either in the Constitution or in Instagram.
Finally, Amazon. We saw a piece of research by SunTrust Robinson Humphrey today, which talked about how despite Amazon's growth in the past 20 years, "the best has yet to come." Only Amazon would have adherents that could say that, even as the shares have already gained 44% for the year.
So here's the bottom line: the NASDAQ, left for dead not that long ago, turned out only to be just resting. Will it continue to rally?
My thinking is investors like these stocks the way Willie Sutton robbed banks: because that's where the money is.
Facebook, Amazon, Google, Apple, Nvidia, Microsoft and PayPal are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells these stocks? Learn more now.